The Week in Trade: UNCTAD pessimism, COP closes and will we get our wine next year?

Thu 14 Dec 2023
Posted by: Benjamin Roche and Danielle Keen

Newspaper on coffee table

A week that saw less than ideal trade statistics released by the Office for National Statistics (ONS) also presented us with a more promising set of proposals for boosting UK trade in Heathrow Airport’s Exporting Excellence report.

But a pessimistic picture is emerging internationally, says the United Nations Conference on Trade and Development (UNCTAD), which suggests that end-of-year statistics for global trade will show a noticeable fall.

The big picture: International trade has fallen by 5% over the course of 2023, UNCTAD said in its Global Trade Update released on Monday (11 December). The value of global trade has fallen by $1.5trn to under $31trn.

A combination of factors, including geopolitical tension and “friend-shoring”, as well as “escalating debt” have contributed to the decline, the agency adds, while commodity price volatility and longer supply chains, “particularly between China and the US” have also played a part.

But there is cause for cautious optimism in the stats, as sectors such as transport equipment saw a boost, with that industry growing 25%.

Good week/bad week: A good week for the progress of the EU-Mercosur trade deal, which seems to be edging closer to success after last week’s setback. The FT reports that Germany is fully behind the deal and even Argentina’s new president, Javier Milei, has shown support following previous criticism. France is the main blocker currently, but with little solidarity shown elsewhere within the bloc.

A bad week for oil producing countries in OPEC. Or is it really? While COP28 concluded with a joint statement agreeing to “transition away” from fossil fuels, the phrasing is more analogous to the “phase down” pushed by oil-producing states than the more ambitious “phase-out” rhetoric, encompassing an eventual switch to renewables.

How’s stat? $2.94bn – the value of the UK’s wine imports, which makes it the second largest importer in the world after the US. Let’s hope the Panama Canal drama and new EU import rules don’t cause too much trouble come January.

The week in customs: The government announced a brand new sanctions enforcement agency is in the works, after several UK firms fell foul of rules in place to stymie Russia economically after its invasion of Ukraine. The new Office of Trade Sanctions Implementation is set to launch next year.

Quote of the week: “It’s embarrassing that it took 28 years but now we’re finally there. Now it finally seems like the world has acknowledged that we need to move away from fossil fuels.”

Dan Jørgensen, Denmark’s climate minister, speaking after COP28’s Global Stocktake Agreement was confirmed.

What else we covered this week: Executive editor Will Barns-Graham covered new proposals to cap cross-border card charges as the UK’s Payment Systems Regulator agreed with claims that Mastercard and Visa have overcharged for fees. Good news for anyone planning next year’s getaway.

Benjamin Roche deciphered the data to bring us the ONS updates and all the news on the UK economy ahead of Christmas.

Phillip Adnett sat down with IOE&IT EU public affairs lead, Fergus McReynolds, to talk about the year ahead in Europe. What could the EU election results mean for trade policy?

True facts: On this day in 1911 Norwegian explorer Roald Amundsen became the first person to reach Antarctica’s South Pole, following a perilous Journey begun over a year earlier. Norway is one of seven countries with a territorial claim to the icy continent. Signed in 1961, the Antarctic Treaty outlines rights of the UK, France, Australia, New Zealand, Chile, Argentina and Norway. Military activity is prohibited in the region along with mineral exploration.